Possible Berlusconi comeback is nightmare for Merkel

BERLIN, Feb 19 (Reuters) - Fears are growing in Berlin that Italy's former prime minister Silvio Berlusconi may return to centre-stage after this weekend's election, imperilling Rome's reform drive and the euro zone's tentative emergence from its debt crisis.

It is unclear whether 76-year-old Berlusconi, a scandal-ridden media tycoon and four times prime minister, will win enough support to wield influence, but even the possibility of a comeback is a nightmare for German Chancellor Angela Merkel.

Not only do investors blame Berlusconi and his centre-right People of Freedom (PDO) party for pushing Italy, the euro zone's third biggest economy, into the debt crisis, but it is also an open secret that Berlusconi and Merkel do not get on. At all.

The contrast in style could not be greater between the flamboyant Italian who has a penchant for face lifts and hair transplants and the disciplined Merkel, raised in Communist East Germany, who still shops in a local supermarket.

Merkel is keeping her lips sealed before the Feb. 24-25 election but in an unusual foray into an election campaign in a European neighbour, Foreign Minister Guido Westerwelle dropped a thinly veiled hint about sentiment in her government.

"We are of course not involved in the Italian election ... But whoever forms the new government, we think it is important that the pro-European course and the necessary reforms will be continued," Westerwelle told the Sueddeutsche Zeitung.

Westerwelle is a member of the pro-market Free Democrats (FDP), junior partner in Merkel's centre-right coalition.

Merkel's spokesman, Steffen Seibert, said on Tuesday that Westerwelle's view was shared by the whole government.

The last opinion polls published before a pre-election blackout suggest Italy's centre left is still leading Berlusconi's centre-right bloc. But almost a third of voters remain undecided or are considering not voting, say pollsters.

Investors are worried that any government that includes Berlusconi could backtrack on reforms introduced by outgoing Prime Minister Mario Monti, who has drawn praise from Berlin for putting the focus clearly on austerity in the past year.

ANIMOSITY

Other members of Merkel's party were more outspoken about the risks of a Berlusconi return.

"If Mr Berlusconi wins the election, this course (of reforms) could be in danger," said Norbert Barthle, budget expert in Merkel's conservatives.

"Doubts about Italy's solidity could have serious consequences for the euro," he told Reuters.

In a sign of the depth of the personal animosity, media have reported that Berlusconi made unflattering remarks about Merkel's appearance in a phonecall wiretapped by investigators looking into his alleged misdemeanours with prostitutes. He denies having said them.

Berlusconi has been sentenced to prison for tax fraud and is on trial for having sex with an under-aged prostitute. He is the polar opposite of Merkel, a pastor's daughter who became a physicist and who is ridiculed by critics as frumpy.

The clash in styles was also on show in 2009 when the usually unruffled chancellor grew visibly impatient, frowning as Berlusconi kept her waiting on the red carpet at a NATO summit in Strasbourg while he chatted on his mobile phone.

Berlusconi blames Merkel, deeply unpopular in Italy for her reluctance to bail out EU partners and portrayed by some Italian media as a Nazi, for his fall from power in 2011.

At a summit in Brussels in October 2011, Merkel and the then-president of France, Nicolas Sarkozy, smiled at each other when asked whether Berlusconi had given them reassurance. That smile was widely taken to undermine Berlusconi's authority and within weeks he was gone and technocrat Monti had replaced him.

Ruprecht Polenz, a member of Merkel's Christian Democrats (CDU) and head of the parliamentary foreign affairs committee, homed in on the personal distaste many members of the German coalition have for Berlusconi.

"This is also about confidence and credibility. The legal cases running against Berlusconi have a negative effect on his political credibility," Polenz told the Sueddeutsche Zeitung. (Additional reporting by Gernot Heller; Editing by Gareth Jones and Alison Williams)